How to Become an Entrepreneur: Essential Skills for Success in 2023
Entrepreneurship comes with a wide variety of perks — like the freedom to pursue your own interests and feel truly fulfilled in your work. Running your own business also comes with a certain degree of flexibility.
But, despite the perks, entrepreneurship can be grueling work at times, and with no guarantee of a significant personal payout for quite a while. There are countless challenges new business owners must be prepared to contend with — challenges like facing rejection and leading a team of people through difficult situations.
To succeed in the cut-throat (yet rewarding) world of entrepreneurship, you need the right approach. Not only do you need to follow the right steps to becoming an entrepreneur, but you also need to adopt the right mindset. Let’s explore some key strategies to help you plan your business and build your entrepreneurial skill set.
10 Steps to Become a Successful Entrepreneur
There’s no single “correct” path to learn how to get started as an entrepreneur. Every founder’s journey is a little bit different. However, there are certainly some common steps that the most successful entrepreneurs tend to follow.
1. Identify Profitable Business Ideas
Every business begins as nothing more than an idea. The best startup ideas solve a pressing problem or fill an urgent demand for a specific group of people. If possible, you should try to find a problem or need that hasn’t yet been addressed by any other business.
One of the best ways to find unmet needs is to ask yourself or people you know what kinds of problems they wish they had solutions for. Many successful businesses began as a personal quest to alleviate a frustration in the founder’s own life.
Locating a brand new, totally unserved demand can be extremely difficult. It’s okay to target a problem that’s been solved before, but you need to make sure your idea provides a better or more complete solution — not just an additional one.
You should also try to focus on a business category that’s actively growing. Looking backwards and copying business ideas that were previously successful is easy, but you’ll reach much greater heights by looking forward. Try to identify emerging trends in your industry that you can capitalize on. Similarly, pay attention to cutting-edge startups in your market and take inspiration from their ideas.
2. Choose the Right Business Idea for You
In your search for profitable business ideas, you may find more than one that looks promising. A great way to select the perfect business idea for you is to choose one that aligns with your personal passions or strengths. Passion-driven founders have an extra ingredient working in their favor because they tend to be more motivated to see their ideas succeed.
Plus, investors love to see passionate founders. When it comes time to raise funding for your business, potential investors will feel more confident in your chances of success if they see that you’re genuinely excited about what your business is doing.
3. Get the Necessary Experience
Entrepreneurs need to be well-versed in whatever it is their businesses are trying to accomplish. Not only will practical business qualifications improve your odds of success, but they’ll also instill confidence in potential investors and business partners.
There are no specific entrepreneur education requirements. However, many founders have a formal education either in business or in a subject related to their startup. For example, if you’re launching a SaaS CRM, it would be extremely helpful to have a degree related to software development or sales and marketing.
In other cases, hand-on experience may be just as valuable — or even preferable. A successful track record actually doing whatever it is your startup plans to focus on is sure to get almost any investor’s attention.
If you’re concerned you lack the necessary experience or education to get your startup off the ground, consider talking with a startup mentor. A mentor can help you determine the best way to leverage your current experience and give you practical insights that will dramatically flatten your learning curve.
4. Select Your Target Audience Carefully
For your business to succeed, you need more than just a high-quality product or service that solves a problem — you need to understand the market for your product or service as well. Who commonly experiences the problem your product solves?
Study available market research in your industry to figure out what group (or groups) of people stand the most to gain from the solution you’re selling. Try to narrow your target audience as much as you can. Startups that wait to scale until after they’ve firmly established themselves within a single niche often perform better in the long run.
Once you identify your target audience, you should begin gearing all your efforts toward this group. In other words, there’s no sense wasting time and resources marketing your product to people who don’t need it. Finding your niche will allow you to direct your attention toward prospects who are ready to buy.
5. Validate Your Business Idea
Validating your business idea means finding out if your product or service actually solves the intended problem for the target group of people. It’s important to validate your product so you can make necessary adjustments before you’re irreversibly committed to an idea that isn’t going to resonate with your buyers.
To validate your business idea, host focus groups with members of your target audience. Show them your product (or your design) and get their feedback. If they like the product, find out whether or not they would pay for it, and for how much. If they don’t like the product, ask them why and find out what needs to change or improve.
Do your best to retain relationships with the people you interview. They could become some of your most loyal early adopters down the road — especially if you incentivize them with rewards or special deals in exchange for their participation.
6. Find a Co-founder
While it’s definitely possible to build a successful business as a solo founder, there are quite a few good reasons to look for a co-founder. First of all, investors are typically more attracted to founding teams than they are to solo founders. This is because they understand the immense amount of dedication it takes to go the distance with a startup, and that teams are often better equipped than lone individuals to handle the challenges of entrepreneurship.
When you bring a co-founder aboard, you significantly expand your startup’s pool of available knowledge, skills, and connections. Co-founders can also offer emotional support to one another in unique ways.
7. Plan Your Business
A business plan is a formal document that acts like a roadmap for your whole operation. Planning your business model may sound like an overwhelming task at this early stage, but rest assured that it’s easier than it sounds.
Start with your business’s goals. Keep them clear and simple, and don’t try to focus on too many at once. Once you’ve identified concrete goals, lay out the steps you’ll take to achieve them.
Here are a few important elements that every business plan should include:
- A description of your business and product and an explanation of its purpose
- A market analysis (including competitor research)
- An outline of your business’s organizational structure
- An overview of your founding team’s strengths and roles
- Your branding and marketing strategy
- Financial projections for the next several years
These are the core components of a small business plan, but you should tailor them to create your own personalized business plan template.
8. Develop Your Product
Now that you have a business plan in place, you have a clear direction for your business. The next step is to create your minimum viable product (also called an MVP). Your MVP is the simplest working version of your product. It’s more than a prototype or a mockup, because it’s fully functional and delivers the intended value to the user. However, it’s not yet aesthetically polished or branded the way the final product will be.
Use your MVP to attract early adopters (now is a good time to invite focus group members from step 5 to try adopting your solution for real) and start to build traction for your business. An MVP is also great to have along during investor pitches to give them something tangible to place their faith in.
9. Build your Network
A strong network is non-negotiable for an entrepreneur. Even if you’re a solo founder, you can’t build a successful startup all by yourself. You’ll need to make connections with many different people along the way who have the skills and resources needed to support your business.
Networking is especially crucial if you plan to raise funds from venture capital firms or angel investors. Many of the best investors won’t even consider funding your business unless you come recommended by someone they trust — preferably a fellow investor or a successful entrepreneur in whom they've already invested.
10. Get Funding
Funding your startup is one of the most significant hurdles you’ll face before launching your business. Many entrepreneurs begin by bootstrapping (self-funding), but you’ll need to get more significant startup capital from somewhere if your business is going to grow and thrive long-term.
- One of the best places to start is with friends and family. If you have someone in your life who believes in your idea and also has the means to give it a financial boost, they could be the ticket to getting your idea off the ground.
- You should also consider applying for a small business grant or small business loan. There are many state and federal grants for small businesses and startups that your business might be eligible for.
- Crowdfunding is another popular way for startup founders to raise money for their businesses. Platforms like Kickstarter and GoFundMe make it relatively easy to collect investments in small increments from many different backers.
- For perhaps the most reliable source of startup funding, consider approaching angel investors or venture capitalists (VCs). These are professional investors who have access to large pools of resources. They typically write the biggest checks, but they also generally expect to receive a substantial share of ownership in your company in exchange for their financial support.
Becoming a business owner isn’t always a straightforward path — in fact, it rarely is. If you need help mapping out your startup journey, get in touch with one of our business experts today. You can find world-class advisors with experience in a broad range of industries who are ready to share their expert advice with founders like you.